Derbyshire County Council’s new saving plans to balance estimated £18.6m budget deficit move a step closer

The Conservative-controlled council currently aims to achieve £31.9m of savings by the end of the current financial year on March 31, 2025, after it has been rolling out a number of controversial cutbacks to manage a previously forecast budget deficit of over £39m for the current 2024/25 financial year.

And following a Cabinet meeting on January 9, the council now aims to deliver more savings having formally noted a number of further proposed cutbacks to meet an additional estimated £18.6m shortfall for the subsequent 2025/26 financial year running between April, 2024 and April, 2025.

A council officer stated: “The council continues to face significant budget pressures as a result of pay and price inflation, and rising demand for services as a result of demographic shifts.

“These budget pressures continue to drive the forecast overspend in 2024/25 and result in additional budget requirements in 2025/26.”

The council has stated that it has faced significant cost and demand pressures during the 2024/25 financial year with continuing economic uncertainty after a period of high inflation and a cost-of-living crisis, and continuing increased demand for council services, particularly in respect of social care.

Changes to council services during 2024/25 have already included agreeing to close ten children’s centres, close and sell eight residential care homes, and close five day centres for the elderly after blaming high demand and cost pressures across social care.

It has also recently agreed to end two types of Discretionary Grant Funding including Adult Social Care Discretionary Grant Funding and Corporate Services and Transformation Discretionary Grant Funding by March, 2025, which means 50 community and voluntary groups now face £1.106m of funding cuts.

The council has also put in place measures including managing staff vacancies where appropriate, pausing recruitment, reviewing vacant posts and the use of agency workers to reduce costs, and reducing expenditure on procurement to only spend money on essential areas, as well as reviewing how it operates to reduce costs through efficiency, rationalisation and improvement.

Opposition Labour Group Leader, Cllr Joan Dixon, has accused the authority of placing the council on the edge of bankruptcy – something strongly disputed by the Conservative council – while opposition Labour and Liberal Democrat councillors have challenged many of the Conservative council’s decisions.

But the Conservative-controlled council claims it has a ‘robust’ savings plan to help and support setting a balanced budget for 2025/26.

The council’s latest budget report has anticipated a number of financial pressures for 2025/26 including pay award increases, national insurance contributions and borrowing, possible election costs, continued costs and demands for adult care and children’s service as well as waste cost pressures.

And after the Cabinet agreed to refer its latest budget plans for 2025/26 to a scrutiny meeting for consideration, it is proposing to meet the next financial year’s funding shortfall of £18.6m with £17.5m savings options and by addressing £1.1m of departmental efficiencies.

The Cabinet’s latest noted budget savings plans – aimed at delivering an £18.9m target of savings in 2025/26 – include: The use of AI tools to streamline and automate planning for adult social care; A review of current extra-care housing schemes; Centralisation and redesign of council support services; A review of transport provision for people using adult social care services; Improving support to reduce hospital stays and maximise independence; Council property rationalisation by reducing its number of properties; Environmental waste and recycling reforms; And making savings in senior management costs in light of Local Government changes including the new East Midlands Combined County Authority.

A council officer stated: “The council is legally required to set a balanced budget in advance of the beginning of each financial year.

“In the context of the significant cost and demand pressures set out above, together with reducing levels of reserves, the council must identify and deliver a significant programme of savings and efficiencies during 2025/26 and beyond.”

Cllr Simon Spencer, Cabinet Member for Corporate Services and Budget, said local authorities are still facing ‘incredibly challenging times’ but Derbyshire County Council is working hard to ensure it can balance its books and provide services for the most vulnerable with ‘robust financial planning’ and other measures.

The council’s Improvement and Scrutiny Committee will meet on January 13 to consider the 2025/26 budget saving proposals before a further budget-setting report is considered by Cabinet on January 30 to be presented and discussed at a Full Council meeting on February 12.

Many of the proposals will be subject to further individual Cabinet reports, public engagement and consultations before any final decisions on each of the latest saving plans.

Council Leader, Cllr Barry Lewis, has said financial pressures continue to mount due to costs and demands which are beyond the council’s control but he claims the solid savings plan for 2024/25 is on track to achieve its target and the council is now focussing on ways to reduce pressures and change its operating model with plans including including automating and digitising support services.